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Right Back Atcha

As we all know, returns are a way of life--even more so with the increase in e-commerce. Because customers can't touch, examine, try out or try on products, they order what they think they might want and return what they don't.

But, as we all know, returns are a way of life—even more so with the increase in ecommerce. Because customers can't touch, examine, try out or try on products, they order what they think they might want and return what they don't.

Many companies have worked hard to make returns easier for the customer to keep their business and develop a certain loyalty. But some companies have worked just as hard to make returns easier on themselves.

If you think this means they're using some sort of automatic identification technology, you'd be right. (If you didn't assume that, you haven't been paying attention.) There are two basic methods of easing returns using AIDC: bar codes (including 2D matrix symbols) and radio-frequency identification (RFID). Depending on your product and business process, one may be right for you.

Bar codes are used for returns by the majority of companies that have developed automated and semi-automated returns processes. For full case shipments, using the bar codes on the shipping label may be all that's needed for accounting and restocking.

For individual goods, that are bar code labeled when they're shipped, you may be able to use the same bar code to expedite returns processing. This works fine for goods in rigid or semi-rigid packaging (such as electronics, books, software, office supplies, machine parts) where the product is returned in its original packaging with the bar code intact. If your products don't typically require inspection prior to restocking, the bar code can be used to automatically route goods into appropriate putaway collection bins.

For products that are in soft packaging (where the bar code may be destroyed when the package is opened), those that require inspection (such as electronics), or those returned because of defects or other problems, the bar code on the item itself is not sufficient. Typically a return merchandise authorization (RMA) is issued—one the customer can generate and print online. Bar codes on RMAs can tie to the item number, reason for the return, customer number, and other information. Having this information available when handling returned goods can speed the return process if, for example, the return is from a good customer with a history of honesty. Customers who are habitual returners may need further scrutiny.

The RMA bar codes can also be used to trigger a label printer to produce any required bar code label(s) prior to restocking. But what about RFID? RFID is more expensive than a bar code (especially one printed by the customer on an RMA)—so why consider them? For rack-jobbed goods, RFID may be a good investment. Although item-level tagging with RFID tags won't be required by retailers for some time, rack jobbers may find it cost-effective to do their own labeling for labor savings.

CDs are a good example of where RFID may work well. CDs being returned from a site are typically packed tightly in a case with only the spine showing. While a mobile computer can be used to read all the bar codes prior to packing them, this is often too time-consuming for the sales rep. Removing all the CDs from the case and " facing" them so that the bar code is facing up can be a time-consuming task. And, because many bar codes are under shrinkwrap, reading them is sometimes challenging for overhead scanners.

One rack jobber of CDs has developed extremely narrow RFID tags (with proprietary data) that fit on the spines of CDs. This company can then read the ID of every CD in the case without handling them. (Reading tags in extremely close proximity does require specialized readers. Gen2 EPC will help address a lot of this but readers do exist already to meet this type of application.) Putaway is still a manual process but eliminating the need to scan in each CD saves labor and increases accounting accuracy, which have more than cost-justified this system.

RFID isn't very cost effective for many applications today but, as RFID labeling of shipping containers becomes more prevalent, the RFID tag may replace some bar codes in facilitating returns. Start thinking about your returns bottlenecks to see if it makes sense for you.